[colechristensen]

>What happens when the music stops?

Bubble bursts, somewhere between 2008 housing crisis and the dotcom bust.

Really dependent on if there are any OTHER structural problems to compound a fast re-valuation of tech stocks. There's plenty of noise about banks holding large amounts of bad private credit debt. There could be a lot or only a little collapse. There's so much uncertainty and the combination of war, high oil prices, and uncertainty about tarriffs that the market struggles to value anything as international fear drives investment into the US and high prices confusing whether growth is growth or just inflation.

Definitive peace in Iran combined with some sort of sobering AI news signaling the end to the infinite growth party could crush the markets.

[ToucanLoucan]

The post-information age has never felt so well-named as it does lately. Investors dumping billions into completely unproven and, largely, undesired tech. Why? Because the Valley doesn't have anything else to sell, seemingly.

Either way, as always, we'll do it the American Way: Privatize the profits, socialize the losses.

[colechristensen]

>The post-information age has never felt so well-named as it does lately. Investors dumping billions into completely unproven and, largely, undesired tech. Why?

Eh. There's too much money. Covid response involved printing a lot of money and it all ended up somewhere. The chaos of the current administration has made everything considerably harder to price and the coincidental rise of the LLM has put us in strange situation that is legitimately difficult to price things correctly.

[ethagnawl]

> There's plenty of noise about banks holding large amounts of bad private credit debt.

This and auto loans. I have NO IDEA how people are affording $770 per month car payments _on top of_ $4.50+ per gallon gasoline.

[malfist]

Some of us are paying $770 on a car, but it's an EV.

[ozgrakkurt]

I don't think current AI is anywhere near the value of internet and it will probably not be for decades.

Also the current president of US is Trump and they are in a war that is pumping the energy prices.

Why not bigger than dotcom burst?

[SlinkyOnStairs]

> There's plenty of noise about banks holding large amounts of bad private credit debt.

This is still only big enough to cause funny banking collapses not actual 2008 scale financial disasters. Banks hold a lot of bad debt, but it's isolated from consumer accounts. Might not want to hold equity in SoftBank though.

> There's so much uncertainty and the combination of war, high oil prices, and uncertainty about tarriffs that the market struggles to value anything as international fear drives investment into the US and high prices confusing whether growth is growth or just inflation.

The big concern lies in what the Trump admin will do. Things could end up merely a bad recession, like the Dotcom and Telecom bubble.

Or they can attempt to keep the bubble going once it collapses, crashing interest rates, and doom the US economy.

[Ekaros]

On other hand private corporate credit freezing might take down lot of business that need credit lines to operate regularly. Even the not so bad zombie companies. Tightening up and not being able to revolve credit anymore could lead to bankruptcies.

[colechristensen]

>This is still only big enough to cause funny banking collapses not actual 2008 scale financial disasters. Banks hold a lot of bad debt, but it's isolated from consumer accounts. Might not want to hold equity in SoftBank though.

Banks are lending to these private funds that are packaging questionable loans into securities (as opposed to banks giving loans or companies issuing bonds). This is the post-2008 place for people to get highly leveraged loans and they probably need to be better regulated.

But yes it doesn't seem like private credit alone will cause problems, the concern I'm trying to outline is a few of these things happening at the same time causing a kind of collapse.

TACO uncertainty is strangely propping up asset values as there's always a credible thought that whatever is happening is pretend or going to be reversed soon. And the expectation that the fed isn't independent any more and will make decisions to prolong the bubble resulting in a bigger crash ambiguously far into the future. Few want to start shorting because they have no concept of how long the market can stay irrational or if 20% inflation might be around the corner instead of a popped bubble.